Electronic Arts has launched a takeover bid that would enable it to retain its position as the world’s biggest independent video game publisher.

EA is offering $2bn cash for Take-Two, publisher of the Grand Theft Auto series of games. Take-Two on Sunday night rejected the offer, saying the proposal “substantially undervalues” the company.

The board has already rejected two unsolicited private bids from EA this month. This forced EA out into the open on Sunday to bring its proposal “to the attention of all Take-Two shareholders”.

EA and Take-Two had combined revenues of $4.1bn in the 2007 fiscal year, meaning that a merger would be likely to give EA the edge over the expected combination of Activision and Vivendi’s games division in the first half of this year.

The $18.9bn merger of Activision and Vivendi to create Activision Blizzard, “the world’s largest, most profitable pure-play video game publisher” was announced in December, with the two companies having about $3.8bn in combined revenues in the 2007 calendar year.

Besides its desire to trump its biggest rival Activision, EA’s offer letter to Take-Two revealed that it coveted its best-selling Grand Theft Auto franchise, with the latest instalment, Grand Theft Auto IV, due for global release on April 29. John Riccitiello, EA chief executive, said he wanted to close the transaction quickly so that EA’s strong publishing and distribution network “can positively impact the catalogue sales of GTA IV”.

Mr Riccitiello formally offered $25 per share in cash for Take-Two in a letter to Strauss Zelnick, chairman of the board, on February 6, after talks by the two sides.

Mr Zelnick replied on February 15 that the board was open to discussing a business combination “at the right time and the right price”, but EA’s proposal met neither criteria.

The EA chief raised his offer to $26 per share last Tuesday, a 64 per cent premium over Take-Two’s closing price a week ago, valuing the company at about $2bn.

He threatened to make the offer public if the Take-Two board was not willing to negotiate and did so after Mr Zelnick rejected the new offer in a letter on Friday.

In a statement on Sunday, Mr Zelnick said Take-Two had been willing to enter discussions with EA on April 30, a day after Grand Theft Auto IV’s release.

“We believe EA’s offer is highly opportunistic and is attempting to take advantage of our upcoming release of Grand Theft Auto IV, one of the most valuable and durable franchises in the industry,” he said.